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West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions

Year 2015, Volume: 5 Issue: 3, 693 - 703, 01.09.2015

Ayman Omar

Abstract

This paper investigates the price spread between West Texas Intermediate and Brent during periods of supply disruptions. Using a sample of 50 events of Organization of the Petroleum Exporting Countries (OPEC) - related unplanned upstream production outages, this paper documents a statistically significant tightening in the price differential. The finding is robust even after accounting for 22 OPEC - related political conflicts, 104 extreme weather conditions in the Atlantic basin, and the period of infrastructural bottlenecks in and around the Cushing, Oklahoma. The result is further confirmed when examining the spread between Light Louisiana sweet and Brent. These findings suggest the need to hedge against such risks and give rise to speculative trading which can be facilitated using the vibrant paper markets.

Keywords

Crude Oil Benchmarks Organization of the Petroleum Exporting Countries Supply Disruptions

Year 2015, Volume: 5 Issue: 3, 693 - 703, 01.09.2015

Ayman Omar

Abstract

There are 0 citations in total.

Details

Other ID JA67NN89DD
Journal Section Research Article
Authors

Ayman Omar This is me

Publication Date September 1, 2015
Published in Issue Year 2015 Volume: 5 Issue: 3

Cite

APA Omar, A. (2015). West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions. International Journal of Energy Economics and Policy, 5(3), 693-703.
AMA Omar A. West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions. IJEEP. September 2015;5(3):693-703.
Chicago Omar, Ayman. “West Texas Intermediate and Brent Spread During Organization of the Petroleum Exporting Countries Supply Disruptions”. International Journal of Energy Economics and Policy 5, no. 3 (September 2015): 693-703.
EndNote Omar A (September 1, 2015) West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions. International Journal of Energy Economics and Policy 5 3 693–703.
IEEE A. Omar, “West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions”, IJEEP, vol. 5, no. 3, pp. 693–703, 2015.
ISNAD Omar, Ayman. “West Texas Intermediate and Brent Spread During Organization of the Petroleum Exporting Countries Supply Disruptions”. International Journal of Energy Economics and Policy 5/3 (September 2015), 693-703.
JAMA Omar A. West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions. IJEEP. 2015;5:693–703.
MLA Omar, Ayman. “West Texas Intermediate and Brent Spread During Organization of the Petroleum Exporting Countries Supply Disruptions”. International Journal of Energy Economics and Policy, vol. 5, no. 3, 2015, pp. 693-0.
Vancouver Omar A. West Texas Intermediate and Brent Spread during Organization of the Petroleum Exporting Countries Supply Disruptions. IJEEP. 2015;5(3):693-70.